Page 38 - Morgan Housel - The Psychology of Money_ Timeless Lessons on Wealth, Greed, and Happiness-Harriman House Limited (2020)

COBACOBA

Cornelius Vanderbilt had just finished a series of business deals to expand
his railroad empire.

One of his business advisors leaned in to tell Vanderbilt that every
transaction he agreed to broke the law.

“My God, John,” said Vanderbilt, “You don’t suppose you can run a

railroad in accordance with the statutes of the State of New York, do
you?”¹⁰

My first thought when reading this was: “That attitude is why he was so

successful.” Laws didn’t accommodate railroads during Vanderbilt’s day. So
he said “to hell with it” and went ahead anyway.

Vanderbilt was wildly successful. So it’s tempting to view his law-flaunting
—which was notorious and vital to his success—as sage wisdom. That
scrappy visionary let nothing get in his way!

But how dangerous is that analysis? No sane person would recommend
flagrant crime as an entrepreneurial trait. You can easily imagine

Vanderbilt’s story turning out much different—an outlaw whose young
company collapsed under court order.

So we have a problem here.

You can praise Vanderbilt for flaunting the law with as much passion as you
criticize Enron for doing the same. Perhaps one got lucky by avoiding the
arm of the law while the other found itself on the side of risk.

John D. Rockefeller is similar. His frequent circumventing of the law—a
judge once called his company “no better than a common thief”—is often
portrayed by historians as cunning business smarts. Maybe it was. But when
does the narrative shift from, “You didn’t let outdated laws get in the way of

innovation,” to “You committed a crime?” Or how little would the story
have to shift for the narrative to have turned from “Rockefeller was a